Austin Market Update: Transactions Ride Positive Momentum

After a big jump, office properties are commanding some of the nation’s highest prices per square foot, the latest CommercialEdge data shows.

In July nearly 627,500 square feet of office space changed hands in Austin, according to CommercialEdge data. Although still robust, traded square footage was down, compared to June’s findings.

Year-to-date through July, the metro has seen an estimated $994 million in office transactions, at an average price of $497 per square foot, easily surpassing the national average of $288 per square foot. Apart from gateway markets, Austin and San Diego were the only two cities to command more than $400 per square foot.

By comparison, in the first seven months of 2020, Austin office sales amounted to only $171 million, pointing towards a definite positive momentum. Prices are also up compared to last year’s average of $356 per square foot recorded in the same period, representing a nearly 40 percent climb year-over-year.

The largest Class A asset to have traded in July was a 204,000-square-foot building within the Parmer Innovation Center. Transwestern acquired the property dubbed Parmer 3.3 from PRP Real Estate Investment Management in a portfolio transaction that included 131,425 square feet of industrial space at Parmer 7.3. According to CommercialEdge, the total sale price amounted to $184 million.

One of the notable transactions that month was DivcoWest’s acquisition of Bouldin Creek, a 170,000-square-foot Class A property in South Austin. Developed by Seattle-based Unico Properties along with Manifold Real Estate and OakPoint Real Estate, the five-story asset came online earlier this year. The project marked Unico’s first ground-up development in Austin.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.

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